Unusual weather across most of the United States last winter created huge and generally positive impacts to the nation's struggling economy. Nationally, an estimated $21 billion in benefits included lower heating costs, a reduction in snow-removal costs, increased construction income, reduced transportation costs, fewer insurance losses and increased retail sales. Most of the $0.5 billion in losses were realized by the tourism industry and by decreases in sales of snow-related equipment and winter clothing.

"The unseasonably warm, dry, and sunny winter weather led to profound effects on the nation's economy at a critical time," said Stanley Changnon, chief emeritus of the Illinois State Water Survey and a professor of geography at the University of Illinois at Urbana-Champaign. "Several economists reported that the weather was a major factor in keeping the United States from falling into a major recession."

Commissioned by the National Oceanic and Atmospheric Administration to assess the economic impacts resulting from the record warm and snow-free winter, Changnon and his son, David, a professor of geography at Northern Illinois University in DeKalb, interviewed numerous business experts and examined various government and private reports. A paper based on their final report has been submitted to the Bulletin of the American Meteorological Society.

"The November 2001 to January 2002 period was the warmest on record since 1895, being 4.3 degrees Fahrenheit above the national long-term average," Changnon said. "The near record warmth in the northern portions of the nation substantially reduced heating costs, adding more than $7 billion to disposable income."

With less demand, natural gas prices also fell significantly during the winter, further benefiting the average consumer. In the Chicago metropolitan area, for example, consumers saved an estimated $1 billion from lower heating costs.

The construction industry was another big winner. "The warm and dry weather allowed record-setting levels of home construction," Changnon said. "Housing starts jumped 6.3% in January to a seasonally adjusted rate of 1.68 million units – the highest level in two years – and in February, housing starts reached their highest level since 1948." Part of the construction bonanza was due to the ground not being frozen in the northern United States, Changnon said. The increase in winter construction represented an additional $2.1 billion income to the industry.

Source: The University Of Illinois At Urbana-Champaign